FAQs: Tax-Free Savings Accounts (TFSAs)
Can I open a Tax-Free Savings Account (TFSA)?
Yes, Polaris supports Tax-Free Savings Accounts (TFSAs).
Can I have more than one TFSA open at a time?
No, you can only have one Tax-Free Savings Account (TFSA) open at Polaris; however, you can have additional TFSAs at other financial institutions providing your total contributions are within the maximum amount permitted.
Can I transfer an existing TFSA to Polaris?
Yes, you can transfer an existing Tax-Free Savings Account (TFSA) to Polaris. You must first open an account with Polaris before a transfer is initiated, and all existing investments in the account will need to be sold prior to the transfer. Polaris only accepts cash transfers, not securities.
Does it cost anything to transfer a TFSA from another financial institution?
Most financial institutions charge a transfer fee when a client moves their account to another institution. In most cases, this fee is approximately $125. However, our custodian (BBS Securities Inc.) will refund transfer fees for Polaris clients up to a maximum of $125 providing their account size is at least $25,000.
Are there tax implications when transferring my TFSA?
No, there are no tax implications associated with transferring a Tax-Free Savings Account (TFSA) from another institution.
What is the total TFSA contribution room?
Total contribution room is determined year-to-year. You can find your allowable TFSA contribution room by looking in your MyCRA account or by contacting Employment and Social Services Development Canada (ERDSC).
Will a TFSA withdrawal affect my Old Age Security (OAS) or result in clawbacks?
No, Tax-Free Savings Account (TFSA) withdrawals will not lead to government benefit clawbacks.
Can dual Canadian and U.S. citizens open a TFSA?
As a U.S. citizen, gains in your Tax-Free Savings Account (TFSA) will be taxed as income by U.S. tax authorities.
Can I withdraw and recontribute money to my TFSA?
Yes, but generally not in the same year unless you have unused contribution room. If you withdraw $2,000 from a TFSA and up to that point you have made the maximum amount of contributions, that $2,000 withdrawal can only be re-contributed the following year. Otherwise, you will be charged a penalty.
What if I over contribute to my TFSA?
You will be charged 1% per month for each month or part of a month by the Canadian Revenue Agency. The 1% tax will apply to the excess contribution and will continue to be charged until the excess amount is withdrawn or is absorbed by newly available contribution room in a following year.
If the value of my TFSA decreases after I contribute, can I deposit more money?
No, any loss in value in your Tax-Free Savings Account (TFSA) investment does not result in additional contribution room.